Bangladesh-Japan EPA: How duty-free imports could affect domestic producers
Trade analysts say that under the agreement, Bangladesh will grant Japan duty-free access for a wide range of products.
Bangladesh's signing of an economic partnership agreement with Japan on Friday (6 February) has drawn a mixed response from businesses and trade experts, who see both strategic gains and significant long-term risks for the economy as the country approaches graduation from least developed country status.
Trade analysts say that under the agreement, Bangladesh will grant Japan duty-free access for a wide range of products, including garments, fabrics, accessories, motor parts, light engineering goods, chemicals, glass, metals, jewellery and pharmaceuticals.
Besides, Bangladesh has committed to gradually eliminating tariffs on Japanese car imports over 12 years.
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Md Hafizur Rahman, former director general of the WTO Cell at the Ministry of Commerce and a member of Bangladesh's EPA negotiation team, said an analysis of the agreement reveals potential challenges for several domestic sectors.
He noted that Bangladesh's plastics industry has developed sufficient capacity to meet domestic demand and export abroad, yet Japanese plastic products will now enter the local market duty-free.
Bangladesh has also offered duty-free access for Japanese glass and light engineering products, despite being self-sufficient in glass production and having export-oriented firms in the sector.
Hafizur warned that duty-free imports of Japanese light engineering goods could undermine domestic producers that lack comparable scale and technology.
He added that Bangladesh has granted Japan duty-free access for all types of metals and jewellery, even though jewellery is considered a promising and fast-growing sector with export potential.
In pharmaceuticals, Bangladesh exports medicines to many countries, benefiting from the flexibilities available to LDCs.
However, under the EPA, Japanese medicines and protective devices will enter Bangladesh duty-free, while Japan has not extended reciprocal duty-free access to Bangladeshi leather products, which remain the country's second-largest export after garments.
